Chris Cillizza, Ill-informed Non-Economist, on the Definition of a Recession

A reader refers me to a non-economist for *the* definition of a recession, in this YouTube video of a CNN segment (highlighting once again why I don’t typically watch YouTube videos),  Regarding the recent CEA article on the definition of a recession, CNN commentator Chris Cillizza states:

“There is a technical definition [of a recession]: two straight quarters of negative economic growth.”

Now, I don’t want to be pedantic, so I’ll allow that there are multiple definitions of recession, but seriously, if you want to be “technical”, one should provide the most authoritative and technically correct definition for the United States. As previous commentators [1] [2] [3] [4] have noted on this website and elsewhere, the most authoritative (given that their intellectual predecessors came up with the business cycle framework) is the NBER’s Business Cycle Dating Committee:

A: The NBER’s traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months. The committee’s view is that while each of the three criteria—depth, diffusion, and duration—needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another. For example, in the case of the February 2020 peak in economic activity, we concluded that the drop in activity had been so great and so widely diffused throughout the economy that the downturn should be classified as a recession even if it proved to be quite brief. The committee subsequently determined that the trough occurred two months after the peak, in April 2020. An expansion is a period when the economy is not in a recession. Expansion is the normal state of the economy; most recessions are brief. However, the time that it takes for the economy to return to its previous peak level of activity may be quite extended.

In response to the question: “The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER’s recession dates?”, the BCDC writes:

Most of the recessions identified by our procedures do consist of two or more consecutive quarters of declining real GDP, but not all of them. In 2001, for example, the recession did not include two consecutive quarters of decline in real GDP. In the recession from the peak in December 2007 to the trough in June 2009, real GDP declined in the first, third, and fourth quarters of 2008 and in the first and second quarters of 2009. Real GDI declined for the final three quarters of 2001 and for five of the six quarters in the 2007–2009 recession.

As I have noted, even if one were to use the two quarter rule, the definition of what was or was not a recession would change over time as the GDP data got revised. An instance of this is exactly the 2001 recession, on which I wrote:

That positive reading [for 2001Q1] remained true through the second and third releases. The advance reading for 2001Q2 was also positive. This remained true through the second and third releases, and only in Q3 did the advance reading go negative, and remain so. However, the advance Q4 reading (1/30/2002) was positive — so there was no two-consecutive-quarter string of negative readings.

Only with the advance 2002Q2 release — incorporating the annual revision — did we get consecutive negative readings, in this case three quarters, starting Q1 running through Q3. The annual revisions adjust the preceding 5 years of GDP estimates (see here).

However, every five years, the BEA undertakes comprehensive revisions, incorporating the latest data. This once again changed the contours of GDP – as shown in Figure 1 and Figure 2. As the most recent series show, there are no consecutive quarters of negative growth. And yet, the NBER declared a recession running from (peak-to-trough) March 2001-November 2001, 2001Q-2001Q4 (recession announcement November 26, 2001expansion announcement, July 17, 2003).

So alternative definitions of recession? Well there’s Jim Hamilton’s regime switching approach, which will — using the 2022Q1 number — determine if we’re in a recession regime or not when we receive the 2022Q2 advance release (see last post, index on FRED). And there are organizations (e.g., OECD), private firms (e.g., ECRI), and individual researchers (e.g., Chauvet-Piger) that provide recession chronologies.

So, bottom line – beware the definitive answer on an economic term from somebody who is not an economist by any definition (Mr. Cillizza received a BA in English).

76 thoughts on “Chris Cillizza, Ill-informed Non-Economist, on the Definition of a Recession

  1. pgl

    Wait, wait – Chris Cillizza did not get the Nobel Prize in economics? Morning Joe’s Steve Rattner hasn’t either. Yes – cable news is not exactly the place to learn anything about economics.

  2. pgl

    A somewhat different topic but CoRev tried to address a question from Dr. Chinn by citing the name of a book written by Mike Kimel who writes for Angrybear. Since I have not written for Angrybear in a long time, I decided to see what Mike is contributing. Here is a nice summary of Mike’s post on the Laffer Curve:

    Me thinks Mike has undermined much of the BS we typically see from CoRev on this topic. Good to see that CoRev is promoting Mike as an expert!

    1. pgl

      BTW – check out the comments under Mike’s post as Sammy made a jerk out of himself as usual.

    2. CoRev

      Hey Barking Bierka – Disgusting NYC Jerk, Mike hasn’t written for AB in years.

      To be clear, Laffer and the president (you know who that is) he advised are prime examples of how presidential policies impact economic outcomes.

    1. pgl

      The Babylon Bee is a conservative Christian news satire website that publishes satirical articles on topics including religion, politics, current events, and public figures. It has been referred to as a Christian, evangelical, or conservative version of The Onion.

      Except stories like this are so stupid only morons like Tucker Carlson and you are laughing.

      1. Bruce Hall

        Mockery/satire can go from left to right and from right to left. It’s only objectionable if it hits too close to home, eh?

    2. pgl

      “The Economic Integrity Protection Act — also known as the “Don’t Say Recession” bill”

      The word integrity should never be used by someone as dishonest as Bruce Hall. And Don’t Say Gay is a homophobic hateful agenda. Oh dear Bruce Hall wants to make fun of being abused by the MAGA hat fear mongers in Florida. I would say Brucie is disgusting but we have known that for a long time.

  3. pgl

    I have to change the subject again alas but JohnH is justifying his support for Putin’s war crimes by noting that the US is not part of the International Criminal Court. Of course this lying troll leaves out a lot. The Obama Administration stated its intent to cooperate with the ICC. Cooperation with the Assembly of States Parties of the ICC was a key component of the Obama Administration’s first National Security Strategy. His Administration worked closely with the ICC during its 8 years in office.

    JohnH has routinely showed his preference for Trump over Obama. Funny thing – Trump routinely trashed the ICC.

    Of course JohnH is a notorious two faced liar so why should we be surprised at this latest excuse to support Putin’s war crimes?

  4. pgl

    How low did Steve Bannon go to overturn the 2020 election:

    About a week before the meeting with Bannon in late October 2020, Guo’s associates had begun posting videos and pictures of Hunter Biden engaged in sexual encounters and using drugs on GTV, a since shuttered video-streaming site run by Guo. In leaked messages previously uncovered by Mother Jones, Guo directed subordinates in detail on how to post and distribute material from Biden’s laptop. He further instructed them to spread false claims about the material: First, he told them to say the files included images of Hunter Biden with underage Chinese girls. There is no evidence at all supporting this allegation. Second, Guo told subordinates to claim that the Chinese government had obtained the material and used it to blackmail Hunter and his father, Joe Biden. That, too, was a lie, people involved in publishing the material told me. Bannon’s role in this effort was never in much doubt. When the New York Post began reporting in mid-October 2020 on other material from Hunter Biden’s laptop, the tabloid explained that its journalists had learned of the hard drive from Bannon and had later received a copy of it from Rudy Giuliani. A computer shop owner in Delaware said he had given a copy of the hard drive to Giuliani.

    Hunter Biden was not having sex with underage Chinese girls. Of course Giuliani would do that as would Matt Gaetz.

  5. pgl

    I got that Mother Jones story reading Kevin Drum. I learned from the comment box this classic:

    Twenty years ago, Kavanaugh was an associate counsel for the independent counsel Kenneth Starr, who was investigating the president. Writing on 15 August 1998, two days before Clinton testified to a grand jury from the White House, he posed 10 suggested questions about the affair with Lewinsky, many of them sexually explicit.

    Kavanaugh’s style was a little different than Clinton’s as he would prefer having a few beers and then raping the girl.

  6. Macroduck

    I would never cast asparagus on a literature degree, but it’s not the best preparation for doing economics. Cillizza doesn’t have anything beyond a B.A. – again, no denigration intended. Where I would raise a red flag is that Cillizza is and has pretty consistently been a political chit-chat guy. Really a bad background for economics, because it starts from the wrong perspective. (See comments from Bruce Hall, CoRev, JohnH and Stephen Kopits for the kinds of error a political bias can bring to analysis.)

    Cillizza’s particular betrayal of his education in this case, as a literature guy, is his misuse of language. He repeated the common error of claiming a non-technical definition to be “technical”. What’s the point of the guy if he won’t use the education he has?

    1. Bruce Hall

      In 1974, economist Julius Shiskin came up with a few rules of thumb to define a recession: The most popular was two consecutive quarters of declining GDP. A healthy economy expands over time, so two quarters in a row of contracting output suggests there are serious underlying problems, according to Shiskin. This definition of a recession became a common standard over the years.

      The National Bureau of Economic Research (NBER) is generally recognized as the authority that defines the starting and ending dates of U.S. recessions. NBER has its own definition of what constitutes a recession, namely “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”

      The NBER’s definition is more flexible than Shiskin’s rule for determining what is a recession. For example, the coronavirus could potentially create a W-shaped recession, where the economy falls one quarter, starts to grow, then drops again in the future. This would not be a recession by Shiskin’s rules but could be under the NBER’s definition.

      Now that that is settled…..

        1. Bruce Hall

          So, are you defending his 2-quarter recession definition or rejecting it? It appears to be the former. Your efforts at trying to write a snide comment toward me only puts you in the idiot box… again.

          1. Barkley Rosser

            Shiskin proposed the two quarter successive GDP decline as ONE of a set of possible “rules of thumb” for knowing when one is in a recession, and he did this in a New York Times column. While he was BLS Commissioner, this was not an official government document, although it got a lot of attention. But, again, it was just one of several possible “rules of thumb,” not definitive definitions.

            Needless to say the politicians and non-economist journalists getting all worked up about this somehow manage to miss all that.

      1. pgl

        I wonder why Brucie forget to tell us WTF he was quoting. Here’s a clue:

        Ignorance about recessions has taken hold because of a simplistic idea that a recession is two successive quarterly declines in gross domestic product (GDP), a measure of the nation’s output. The idea originated in a 1974 New York Times article by Julius Shiskin, who provided a laundry list of recession-spotting rules of thumb, including two down quarters of GDP. Over the years the rest of his rules somehow dropped away, leaving behind only “two down quarters of GDP.”

        A 1974 memo that discussed a laundry list of indicators. Gee Bruce – your quote from an unnamed source is highly misleading. But hey – you do this garbage all the time.

      1. pgl

        You did your best Pinocchio there. How long is your nose by now – since you lie almost as much as Trump.

        1. Bruce Hall

          So, you have no idea to what I was referring, but felt compelled to try to write a snide comment anyway. Figures.

          1. CoRev

            That’s why he’s called Barking Bierka. He has no control over his Pavlovian response.

          2. Menzie Chinn Post author

            CoRev: To my knowledge, you’re the only person who (1) calls him Barking Beirka, and (2) doubts the forecasting information in futures prices. And doesn’t understand (still) the distinction between I(1) and I(0).

  7. Ivan

    May I mention that “there is a technical definition” of my ass as a raspberry. It may not be “the technical definition”, nor a well-know or accepted “technical definition”. However, I could walk you through this “technical definition” – but I will spare you.

    1. Macroduck

      No, don’t hold back. I expect it would be as enlightening as explanations of how the country with the highest consumption of petroleum in the world and 22nd out of 214 in terms of consumption per capita is engaged in a war on oil. As enlightening as an explanation of how U.S. policy is responsible for worldwide inflation and worldwide economic slowing. More enlightening, probably.

      1. Ivan

        You are setting the bar quite low here – and it could indeed enlighten a place where the sun doesn’t shine. It may even increase the average argument rationality for comments here. Butt I would need to show pictures and I don’t know how – not to speak of my fear of the wrath of ltr

    1. pgl

      No but we are saying your comments are beyond pathetic. Do run away as no one gives a damn about your BS.

    2. Bruce Hall

      Don’t bother with pal’s comments. He/she/it (not sure which pronoun to use) has only one mode: snide.

  8. Steven Kopits

    I like Chris Cillizza. He’s usually to the left of me — he’s a commentator on CNN after all — but he’s smart and very watchable.

    A recession is, strictly speaking, not defined as two down quarters. However, that is the generally accepted and colloquial definition, the man-on-the-street version. As a practical matter, a recession is usually defined as two consecutive quarters of declining GDP. The Biden acolytes, including much of the economics profession — led by Econbrowser! — is now turning itself inside out to explain why the widely accepted definition is not true.

    Cillizza points this out: “You don’t get to change the nomenclature in the middle of a campaign because [the commonly accepted notion of a recession] doesn’t work for you.” To which the moderators replies: “Well, again, your voters are going to feel what they are going to feel in their lives, no matter what you say. ” To which Cillizza replies: “Exactly.”

    Cillizza is making the same point I have been making for the last several weeks ad nauseum, that is, trying to move the goalposts at this point in the election cycle is bound to be counter-productive. If that 55% of the public who believes we are in recession sees that we have two pretty stiff quarters of GDP decline (seemingly the expectation for Thursday’s news) — the ordinary definition of a recession — and yet the Biden administration and the vocal part of the economics community says that it’s all in the public’s head, well, I think the public is going to believe that 1) economists in charge are wildly incompetent; 2) those 47 or 48 notable macro economists who said no recession in 2023 are useless at best, and 3) the economics profession is a partisan affair with large segment of the profession willfully lying to deceive the public. That’s the simple read of the situation.

    And unfortunately, I think it’s true. Does anyone believe that these same economists would not be lining up one after another to declare a recession if Trump were in power? Of course not.

    So, unfortunately, the economics profession’s credibility is really in a substantial hole at present, a hole of its own making.

    1. Menzie Chinn Post author

      Steven Kopits: Cillizza said “technical”. If he had said a recession was in his view 2 quarters consecutive negative growth, well he’s allowed. But he used the term “technical” in this context thereby rendering the word meaningless since it was exactly a *non*technical definition.

      1. 2slugbaits

        Almost as annoying as when people say “literally” when they really mean “figuratively.”

    2. Macroduck

      “…that is the generally accepted and colloquial definition, the man-on-the-street version. As a practical matter, a recession is usually defined as two consecutive quarters of declining GDP.”

      Colloquial, practical, generally accepted, man-on-the-strret? No. That’s just you, trying to weasel back into claiming there’s a recession when no recession has occurred.

      You aren’t any more an expert on colloquiqlisms, generally accepted or practical definitions than you are on economics or international affairs. Once again, you are pretending to knowledge you do not possess. Pity you clients.

      1. pgl

        I almost lost my dinner when i read

        I like Chris Cillizza. He’s usually to the left of me — he’s a commentator on CNN after all — but he’s smart and very watchable.

        I have watched Chris Cillizza and scratched my head at the utter nonsense coming from his mouth. But then I realized it was Stevie pooh that wrote that. He would think Chris Cillizza is smart as the bar for him is incredibly low.

      2. Steven Kopits


        The topic is all over the press. It is possible that I was the one who instigated the matter, Menzie popularized it, and Frankel gave it legitimacy. But this whole is-it-a- recession controversy is now well entrenched in the media.,the%20second%20quarter%20as%20well.

        If I were Frankel, I would never have written that piece. Huge credibility sapper and absolutely poured gasoline on the fire of the controversy.

        1. Menzie Chinn Post author

          Steven Kopits: This issue comes up every time there’s a slowdown. For sure you did not initiate it, as I’ve been having this debate ever since I was an undergraduate.

          1. Steven Kopits

            No, Menzie, the two quarter controversy is new. I don’t ever recall two back-to-back quarters of stiff GDP declines leading to a controversy about whether it was a recession.

            But if you want to provide some sources, by all means.

          2. Barkley Rosser


            The reason there has not been anything like the level of controversy we are seeing now, although there has been some, is that since 1947 every time there were clearly two consecutive quarters showing negative GDP growth, pretty much all the other indicators the NBER committee looks at: employment, industrial production, gross domestic income, were pretty much all also going down as well. NBER committee agreed it was a recession, although it was the totality of all of these in place that nailed it. People largely forgot about the odd case of 1947, but it was indeed the last time (assuming we do see Q2 negative for GDP) when we had two consecutive quarters of GDP decline, but employment in particular did not go down and the NBER committee refused to call it a “recession.”

            The exceptions since 1947 were on the other side, situations that the NBER committee called recessions when there were not two consecutive quarters of GDP decline, with the most dramatic of those the quite recent case of Q2 in 2022. But I have not heard anybody complaining about the NBER committee calling that a recession because it was so dramatically deep, although, of course, you have been trying to push your own terminology of calling that a “suppression,” which is not getting picked up by anybody, sorry.

            Of course, we have not yet seen the numbers, but this is a case where just too many of those other things we know the NBER committee looks at simply do not seem to have been going down in Q2. Some of those may now be going down, and chances are quite high that we may well end up having a recession sooner or later by the lights of the NBER committee. But especially employment, which we know they take very seriously, was clearly rising throughout the whole first half of the year, both quarters, and pretty much all economists have been pointing this out, even if some of the media people seem not to pay much attention to it, such as Cizilla.

            So, that is why we are having this controversy so noisily now. Indeed, there certainly has been for a long time, both officially in other nations as well as in lots of media discussions and textbooks, this idea of two quarters GDP decline being the “technical definition” of a recession. But it never was the actual definition in the US. So, indeed, we may be in for a repeat of 1947.

            BTW, since you are so into your third rate macho game of demanding people provide point estimates, what is your point estimate on Q2 for GDI? Again, while it and GDP are supposed to be identical, they behaved massively differently in Q1, with GDI’s increase more than offsetting GDP’s decline, and there being a history of as revisions come in, it is GDP that tends to get revised more than GDI and usually in the direction of GDI. It looks suspiciously like employment is tied more to GDI than GDP. So, macho man, what is your point estimate for the Q2 change of GDI?

            Note, while I am avoiding numbers, I have said I think their relative changes will resemble Q1, with GDI looking better than GDP, although I do not know if either will be positive or negative. On thinking about it, it occurs to me that we could have a large surprise of them flipping. If this is the case, I predict it will be due to the odd item I have been pounding on about, for which data seems to be all over the place and not many are talking about, but which played a crucial role in the unexpected Q1 GDP decline, those darned inventories changes. There looks to be evidence they rose a lot in Q2 after declining in Q1. If they are a player in this GDP/GDI disjuncture, and they go strongly opposite of Q1, heck, we could have GDP increasing in Q2 while GDI declines. I am not predicting that, simply noting it is not out of the question, given how completely screwy this whole situation has become. Darned near anything is possible.

            If that does happen, do give me credit for noting its possibility.

          3. Ivan

            I define “stiff GDP declines” as at lest 50%. So two quarters of stiff GDP declines has only happened in 0 of the past 10 recessions. It didn’t happen in Q1 of 2022 and will not happen in Q2 or any other Q’s this year or next. So according to Steven Kopits we are not in a recession and will not get one for a long time. Thank you Steven for agreeing with me and being even more certain than me that are not and will not be in a recession for the foreseeable future.

          4. pgl

            ‘Steven Kopits
            July 26, 2022 at 3:53 pm
            No, Menzie, the two quarter controversy is new.’

            Dude – please stop saying incredibly stupid things. You are wrong about this. You are wrong in your claim that real GDP fell by 11% in 1947. Then again you are wrong 99.8% of the time so why stop now?

        2. pgl

          “It is possible that I was the one who instigated the matter,”

          Yes – you are the most arrogant clown in the history of mankind.

    3. pgl

      “Cillizza is making the same point I have been making for the last several weeks ad nauseum, that is, trying to move the goalposts at this point in the election cycle is bound to be counter-productive. ”

      Excuse me but you seem to have a special mobile device that changes the goal posts hourly.

      “the economics profession’s credibility is really in a substantial hole at present, a hole of its own making.”

      This from a troll that never had an ounce of credibility.

    4. pgl

      “Does anyone believe that these same economists would not be lining up one after another to declare a recession if Trump were in power?”

      When Trump was President he wanted the FED to lower interest rates even as he declared we had the strongest economy ever. And did Princeton Steve object? Of course not because he wanted to be on Fox and Friends each morning to push his anti-immigrant vile.

    1. ltr

      ———– style was a little different than ——— as he would prefer having a few beers and then —— the —-.

      [ Repeated bullying harassing language, replete with sexual innuendo, is unfortunate. ]

    1. pgl

      You must not get how Bloomberg works. Ellen Zentner is a news reporter – not one of their analysts. Then again – you do not know the difference between the two professions.

    2. pgl

      Oh wait – Stevie’s crappy description of his own link led me to believe this was 2nd hand information but it is 3rd hand rumors. OK a Bloomberg reporter cited some Morgan Stanley person who totally misrepresented what the folks at the White House wrote. So permit me to provide a 1st hand link:

      Come on Steve – this is an old and a very dishonest game. Try reading the Whitehouse link. You might learn something for once in your lying little pathetic life.

    3. Macroduck

      Ellen is good at what she does. Heck, she bought my analysis for a while to cover gaps in her own, so I know she’s good. But she misspeaks, like anyone else. Here, NBER is right, Ellen misspoke and Stevie doesn’t know the difference.

  9. Steven Kopits

    And this, from the Federal Reserve Bank of Australia:

    Technical recession

    The most common definition of recession used in the media is a ‘technical recession’ in which there have been two consecutive quarters of negative growth in real GDP. This definition often appears in textbooks and is widely used by journalists. On this definition, Australia had not recorded a recession for 29 years since the recession of the early 1990s.

    1. pgl

      You do not even know the name of Australia’s central bank? Yea – you are STUPID. BTW there is also a Reserve Bank of New Zealand. Do you need a map to figure out where that is?

    2. pgl

      Australia had not recorded a recession for 29 years since the recession of the early 1990s.

      Aren’t you an energy consultant? Then why do you not get that oil and natural gas prices have been booming and the Aussies export a lot of both. Come on dude – everyone knows Australia has enjoyed the benefits of the commodity boom. Everyone except Princeton Steve!

  10. ltr

    Confusion evidently occurs readily:

    What Is a Recession?

    A recession is a significant, widespread, and prolonged downturn in economic activity. Because recessions often last six months or more, one popular rule of thumb is that two consecutive quarters of decline in a country’s Gross Domestic Product (GDP) constitute a recession.


    1. a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

  11. ltr

    July 26, 2022

    Xinjiang’s GDP up 4.9 percent in H1

    URUMQI — The gross domestic product (GDP) of northwest China’s Xinjiang Uygur Autonomous Region totaled 827.9 billion yuan (about 122.7 billion U.S. dollars) in the first half of 2022, up 4.9 percent year on year, according to local authorities.

    During the period, the added value of the region’s primary industry reached 55.47 billion yuan, up 5.4 percent year on year, and that of secondary industry reached nearly 350.1 billion yuan, up 5 percent year on year, according to the regional statistics bureau.

    The added value of the region’s tertiary industry grew 4.7 percent to approximately 422.34 billion yuan.

    The total output value of the agriculture, forestry, animal husbandry and fishery sectors reached 119.94 billion yuan during the first six months, up 5.4 percent year on year.

    Facing the adverse influence of COVID-19 and increasing downward economic pressure, Xinjiang’s economy has shown strong resilience, with its major indicators gradually picking up pace, said Hao Junqing, deputy director of the statistics bureau.

    1. ltr

      August 4, 2014

      Real per capita Gross Domestic Product for European Union, United States, China and India, 1977-2021

      (Percent change)

      August 4, 2014

      Real per capita Gross Domestic Product for European Union, United States, China and India, 1977-2021

      (Indexed to 1977)

      [ As Xinjiang is faring well, for all the particular turmoil, suggests all China will fare well from here. The Chinese manage the economy as problem solvers, and the last 45 years show us just how adept the problem-solving is. ]

  12. Steven Kopits

    And this:

    A recent Morning Consult/Politico poll showed that 65% of US voters said in mid-July that they think we’re in a recession….and that’s compared to just 51% saying that in March 2020, the beginning of the US Covid outbreak and the start of the last recession….And according to a survey last month from Boston Consulting Group, nearly 80% of investors anticipate a US recession will start some time within the next 12 months…and more than half of those surveyed think it will begin before the end of 2022.

    1. Macroduck

      Did morning consult ask how many of them believe in ghosts? Did morning consult ask them the definition of recession?

    2. baffling

      it seems we are being talked into a recession. probably for political gain, as corev has even admitted to. that is not a good state for the economy.

  13. ltr

    July 26, 2022

    Recession: What Does It Mean?
    By Paul Krugman

    There’s a pretty good chance the Bureau of Economic Analysis, which produces the numbers on gross domestic product and other macroeconomic data, will declare on Thursday, preliminarily, that real G.D.P. shrank in the second quarter of 2022. Since it has already announced that real G.D.P. shrank in the first quarter, there will be a lot of breathless commentary to the effect that we’re officially in a recession.

    But we won’t be. That’s not how recessions are defined; more important, it’s not how they should be defined. It’s possible that the people who actually decide whether we’re in a recession — more about them in a minute — will eventually declare that a recession began in the United States in the first half of this year, although that’s unlikely given other economic data. But they won’t base their decision solely on whether we’ve had two successive quarters of falling real G.D.P.

    To understand why, it helps to know a bit about the history of what is known as business cycle dating.

    A modern economy is a constantly changing thing, in which individual industries rise and fall all the time. (Remember video rental stores?) At some point in the 19th century, however, it became obvious that there were periods when almost all industries were declining at the same time — recessions — and other periods during which most industries were expanding.

    To understand these fluctuations, economists wanted to compare different recessions and search for common features. But to do that, they needed a chronology of recessions, one based on a variety of measures, since G.D.P. didn’t even exist yet as a concept, let alone a number regularly estimated by the government.

    A seminal 1913 book by the American economist Wesley Clair Mitchell is widely credited with beginning the systematic empirical study of business cycles. In 1920, Mitchell helped found the National Bureau of Economic Research, an independent organization that soon found itself devoting much of its research to economic fluctuations, and began offering a chronology of business cycles in 1929.

    Since 1978 the N.B.E.R. has had a standing group of experts called the Business Cycle Dating Committee, which decides — with a lag — when a recession began and ended based on multiple criteria, including employment, industrial production and so on. And the U.S. government accepts those rulings. So the official definition of a recession is that it is a period that the committee has declared a recession; it’s an expert judgment call, not a formula….

    1. Paul Mathis

      Prof. Krugman is right as usual.

      But there is another point to be made: 1Q2022 GDP was negative primarily because of a massive trade deficit and inventories depletion.
      Bloomberg: “Together, trade and inventories subtracted about 4 percentage points from headline growth. Government spending shrank, also weighing on GDP. But real final sales to domestic purchasers, a measure of underlying demand that strips out the trade and inventories components, accelerated to a 2.6% annualized rate.”

      So the first quarter was not recessionary at all because final demand was very strong, pulling in foreign goods and depleting inventories. Unfortunately, neither factor was sufficient to reduce inflation with consumers on a buying spree. NWS, the dollar gained strength contradicting standard theory and reducing inflation.

      Looking forward, the real risk is that the Fed will be too aggressive in raising rates which could crash the housing market into a years long recession. The Fed did this in 1978 when mortgage rates massively increased and existing home sales were cut in half over 4 years. They did not surpass their 1978 peak until 1996.

  14. baffling

    it is important to note that a quarter is a very arbitrarily defined period of time. by definition, two quarters is six months. so a recession then should be 6 months of decline? i understand we don’t necessarily have data over those intervals. however, this should make clear that trying to apply a strict rule over an arbitrarily defined length of time could produce different results, even interpretations, of performance. the coarse use of a quarter is meant to identify the idea of a recession. but as we have seen, its use creates a problem with a technical definition in a limiting sense. the speed with which events occur today is probably much faster than 50 or 100 years ago. perhaps we should not cling so definitively to definitions created in a different era?

  15. Moses Herzog

    @ Menzie
    Menzie, if you truly know/”understand” me, you will understand, without me saying it, that this is more a light-hearted and affectionate index finger poking of your ribs than some kinda “gotcha”. But, you do know NBER has a YT channel, as does the Federal Reserve and…….. I even saw some international finance and currency guy at UW-Madison lecturing there with a happy grin on his face 2-3 times. I am a “fanboy” of his who will likely never meet this currency guru in person, so I was glad Youtube allowed me to observe his persona in close to real time.

    TV for decades has been known as the boobtube, and guys from Ernie Kovacs to David Letterman have made money doing parody send-ups of the “deeper meaning” of the TV medium. But you watch PBS right?? Every type of media is a “tool”. You can use a hammer to kill your neighbor or use a hammer to build a homeless person a house. It is the user’s prerogative.

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